Global Shopping Centre Development At ‘All Time High’
Global shopping centre development continues apace with growing middle class populations and retailer expansion leading to unprecedented levels of construction and new openings, largely in emerging markets, according to global property advisor CBRE.
CBRE measured the level of shopping centre development in 180 of the world’s major cities to identify the most active markets, both in terms of 2011 completions and space currently under construction . The research found that development activity has reached significant levels, with 29.6 million square metres under construction – equivalent to all the combined existing space in France, United Kingdom (UK) and Germany – while 7.8 million square metres of new space opened in 2011.
Emerging markets such as China, Turkey, and India are far more active than the more mature markets of western Europe and North America. Growing middle class populations have led to an upsurge in new development to meet demand, while the maturity of the retail sector in western Europe and North America has forced retailers from these markets to cross borders in order to grow their businesses. In 2011, new shopping centres opened in 63 (35%) of the cities covered in the survey, of which 50 were in emerging markets. In contrast, only five cites in western Europe saw the opening of a new centre last year.
Chinese cities currently dominate shopping centre construction activity. In the 180 cities analysed exactly half of all the shopping centre space under construction is in China, with Asia accounting for 70% of all schemes currently being built. Outside of China, the most active markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), New Delhi and Sao Paolo – five cities in three regions.
Neville Moss, EMEA Head of Retail Research, CBRE, commented:
“It is our view that shopping centre development activity is currently at an all time high, with growing middle class populations, particularly in the BRIC markets, fuelling this demand. The shopping centre concept, once the preserve of the western world, is becoming ubiquitous. China has led the way in recent years and with huge opportunities still existing in its secondary cities, it is likely to remain the most active development market over coming years. However, the upsurge in development is also evident in Turkey, Mexico, Malaysia and Vietnam among others.
“Meanwhile, the maturity of the retail sector in western Europe and North America has resulted in much lower levels of development, but it has also forced retailers from these markets to seek new opportunities in fresh markets in order to grow their businesses. This trend is expected to continue and is helping to underpin the development of high quality, new retail space in emerging markets.”
In Europe, new shopping centres were completed in just 15 out of the 96 cities covered in the survey. Outside of Russia and Turkey only the Ukraine (Kiev and Kharkov) and Italy (Milan and Turin) saw the completion of more than one new centre. London, with the completion of Westfield Stratford City, was the only city in Europe where more than 100,000 sq m was completed. Likewise there was virtually no new development in the mature shopping centre markets of North America and the Pacific region.
Neville Moss added:
“While the low level of shopping centre development in western Europe reflects the maturity of the market, a difficult economic climate and the fact there is simply too much retail space, it is also true that there is a lack of quality of space in many markets. Modern units of the right size, type and in the location that retailers require remain in short supply. This suggests that redevelopment of existing retail space - whether in shopping centres or high street locations - will remain the focus of development activity over the next few years.”